The backbone of the economy in Somali National Regional State is livestock.
While this remote, underdeveloped region covers a vast area of the Ethiopian
territory, its population is relatively small and predominantly nomadic with up
to an estimated 90 per cent of the population deriving their livelihood from
pastoralism and animal related activities. Recently released official census
results for Somali Region indicate a population of nearly 3.5 million, of which
only some 15 per cent live in so called "urban" centers. As in the neighbouring
countries populated by ethnic Somalis, also in the Ethiopian Somali Region
(Region 5) clan- and sub-clan affiliation plays a very important role in social
and economic life. The clan-kinship is strongly maintained across international
boundaries and accordingly the economy and trade routes are also related to
the age-old links of the clan-system.

While it was already difficult enough to carry out a population census in this
rugged region suffering from infrastructure shortcomings and inadequate
communication facilities, it is even more difficult to establish the animal
population of the region. The Bureau of Agriculture in Jijiga, the regional
capital, estimates livestock in Somali Region to comprise currently 11.5
million sheep and goats, 6 million cattle and 1.5 million camels. Other
sources, however, produced much lower estimates.

Over the last three to four decades the Somali pastoralist society experienced
a significant change in the economy. Basically, it was a change from a
livestock subsistence society, which lived mainly on milk and meat as
staple foods complemented occasionally with a little grain, to a livestock
export oriented market economy developing comparatively sophisticated trade
links, where the marketing of livestock allowed both cash earnings and -
through bartering - the inflow of food- and non-food consumer goods from far
away. This development, taking place gradually and of course intermediately
hampered by warfare, was initiated in the Fifties and Sixties, when across the
Red Sea Saudi Arabia started to enjoy its oil wealth. That wealth allowed the
Saudis - among other fruits of a modern economy - to begin large-scale imports
of livestock from the Horn of Africa countries, including Ethiopia's Somali
Region.

The same country which decades ago opened a window of opportunity by offering a
livestock export market inducing socio-economic change and modest wealth in
various Somali areas has recently closed that window. Alerted by rumours
indicating the occurrence of Rift Valley Fever affecting human and animal
health in parts of northern Kenya and southern Somalia, the Saudis imposed a
ban on livestock imports into Saudi Arabia from the Horn of Africa countries
and Yemen. Recent field findings, however, by experts from different
organisations including, among others, the United Nations Food and Agricultural
Organisation (FAO) and the World Health Organisation (WHO) concluded that the
problem, initially exaggerated, had actually occurred only in some pocket areas
of Kenya and southern Somalia and was now contained. In a statement released in
Nairobi on 10 March the UN Resident and Humanitarian Coordinator, Dominik
Langenbacher, said: "The Rift Valley Fever Outbreak in Southern Somalia is
over, all the evidence we have collected so far suggests that the epidemic has
burned out. And there is no evidence at all that Rift Valley Fever ever spread
beyond the flood affected areas." The Ethiopian authorities also declared that
there was no Rift Valley Fever in the country.

Regardless of this development, the Saudi import ban on livestock coming from
the Horn of Africa countries, including Ethiopia, became effective in early
February. What are the implications? Which impact, if any, can be felt two
months after the ban in an area which used to depend heavily on livestock
exports ?

Trying to find some answers to these questions was the objective of a short
mission fielded by the Emergencies Unit for Ethiopia (EUE) from 31 March to 7
April to the northern area of Ethiopia's Somali Region. Starting out of Jijiga,
the regional capital, the mission covered the towns of Hartisheikh, Harshin,
Camoboker, Rabasso, Daror and the areas in between over some 270 kilometres.
Numerous discussions were held with local officials, livestock traders and
brokers, livestock owners and shepherds, shop owners and elders. The route
chosen, the so-called "Aware Refugee Camps", is an area which is different from
areas further south where local people do not have the possibility of
benefiting directly or indirectly from the refugee camp-related international
activities. On the other hand, the area covered - given its close proximity to
the border with neighbouring north-western Somalia (the self-declared
"Somaliland") - definitely has its own local economy centered around the export
of local livestock and the transit of livestock coming from other parts of
Somali Region en route to Hargeisa, the capital of "Somaliland", and the sea
ports, primarily Berbera.

Absolute figures on the volume and shares of animal exports are difficult to
obtain. Different sources come up with different numbers. While some claim to
present actual data, others, particularly those providing oral information,
point out the "estimate" character of the provided figures. Among the various
sources used as background information by the mission, the following three, all
published before the ban, might be of particular interest to the reader:

"Livestock Marketing and Cross Border Trade in the Southeast of Ethiopia" -
By Dr Robert Shank, Consultant Agriculturist UNDP-Emergencies Unit for
Ethiopia. May 20, 1997.

"Republic of Somaliland - Two-Year Development Plan 1998-1999" - Ministry of
National Planning and Coordination, Hargeisa 1997. Sponsored by UNDOS.

For the north-western part of Ethiopia's Somali Region the main port of
livestock exports is Berbera in "Somaliland". While other important ports of
exit in Somalia include Bosasso in the northeast and Kismayo in the south, the
mission focused its field-research on the cross-border trade between Ethiopia
and "Somaliland" with Hargeisa and Berbera being the main transit centers. Of
the livestock exported annually through Berbera port between 60 per cent
(according to "Somaliland" sources) and 80 per cent (Ethiopian sources) are of
Ethiopian origin. The estimates of the number of animals exported also vary
considerably. While FEWS estimates total animal exports ex-Berbera in 1996 at
about 1.3 million animals, the "Somaliland Two Year Development Plan" lists for
the same year and the same port 2,480,090 animals (2,372,656 sheep and goats;
64,606 cattle; 42,828 camels) at a total export value of 155.6 million US
Dollars. For the year 1997 the "Development Plan" extrapolates a total of
2,857,468 animals. Meanwhile, the Hargeisa based weekly newspaper "The
Republican" in its issue of 14 February stated: "Somaliland's [total; including
also minor ports] livestock turnover for the year 1996 was 3.6 million heads
and in 1997 more than 2.7 million heads were exported to Saudi Arabia and the
Emirates. Somaliland's annual earnings from livestock is estimated over $
200,000,000 every year."

Livestock-traders in Hartisheikh town estimate the numbers of animals exported
through Berbera port to be "two to three million in a normal year". Due to
capacity constraints, concerned authorities in Jijiga are not in the position
to provide regional export data.

While clearly the bulk of the animals exported through Berbera come from
Ethiopia's Somali Region, government revenues are collected only by
"Somaliland". According to information gathered from Ethiopian-Somali livestock
traders and brokers, export fees in Berbera are, per head of sheep and goats
US$3.50, cattle US$18 and per camel US$35. On the Ethiopian side, apparently
only local municipal markets collect fees on every animal brought for sale. At
Jijiga livestock market, for example, the fees are 1 Birr per shoat, 2.50 Birr
per cattle and 5 Birr per camel. Reportedly, none of these municipality
revenues are shared with the regional fiscal system and no national export
taxation system is in place. Mohammed Mealin Ali Kadir, the new President of
Ethiopia's Somali Region, confirmed to the mission during a brief meeting prior
to the departure to the field that "since the overthrow of the Dergue
regime no official export market mechanism is working in our region - all
animal exports are conducted informally." During the Dergue the
Livestock Marketing Board used to transport animals from the region in special
livestock trucks to slaughterhouses from where the meat was processed either
for canning or chilled for export. This formal export business was directed
both at international consignees and at local markets. As the Bureau of
Agriculture and its South-Eastern Rangeland Project (SERP) in Jijiga pointed
out, the nearest slaughtering and processing facility, in Dire Dawa, "is not
operational since a number of years". According to unconfirmed information
reported recently in Addis Ababa, a major international investor is currently
purchasing the former Livestock Marketing Board's assets such as trucks,
marketing centers, holding areas, abattoirs and canning factories.

Currently all meat exports out of Somali Region comprise - in the absence of
chilled meat processing facilities - live animals which are "informally"
exported to ports in neighbouring Somalia and, especially for the north-western
part of the region, to "Somaliland". Very little if anything goes beyond Harar
and Dire Dawa to central Ethiopia. In terms of exports, it might be interesting
to highlight the preferred types of livestock. Since female animals are
generally kept with the stocks in order to maintain reproduction rates and milk
production, the majority of animals sold for export, mainly to Saudi Arabia,
are males. The special breed, the male "Somali black head" or "fat-tailed
sheep" is the favourite, followed by male goats, male cattle and young male
camels, which are imported into Saudi Arabia mainly for meat and not as a pack
animal. Male camels are said to have, at the age of four, five years, a
particularly "tasty meat" and are very much appreciated. Religious practices,
for instance at the end of the Islamic fasting month Ramadan and for Id Al Adha
or Arafa during the Haj, the Mecca-pilgrimage season, favour the traditional
home-slaughtering of animals, thus actually pushing the demand for live animal
imports.

Since the Saudis banned livestock imports from Horn of Africa countries the
flourishing trade of the recent past came to a virtual stand-still. "False
rumours on Rift Valley Fever are destroying our markets", says Somali National
Regional State President Mohammed Mealin, well aware of the current economic
danger. But as of the time of the mission's visit to Jijiga, deliberations on
the situation were still in process and no impact-study had been conducted in
the field. However, the Director of the SERP Eastern Branch joined the
EUE-mission to fill that gap. Meanwhile, the "Government of Somaliland" had
disseminated on 14 March during an IGAD (Inter-Governmental Authority on
Development) summit meeting in Djibouti an Appeal. Pointing out that "livestock
exports account for over 90% of all foreign exchange receipts of Somaliland"
and that "the limited foreign exchange income we receive from exports to Saudi
Arabia is the sole source of payment for all essential imports such as food,
medicines, fuel, building materials and other commodities", the document warns
of severe consequences. In order to prevent "an emergency situation of major
proportion arising in Somaliland" the document appeals to IGAD and the
international community in general to help lift the ban immediately and to
prepare as a preventive measure "a package for emergency assistance".

The weeks and days before Id Al Adha/Arafa (which fell this year on 7 April)
are normally the peak period for the sale, trekking and export of livestock.
And during this "special" period markets are usually crowed. Not this year. The
enclosures, which in a normal year at this time are packed with animals,
presented at the time of the mission's visit a picture of alarming emptiness."
Only 20 per cent of the usual animals are brought this year to the market",
says an elder in Jijiga, who used to be a wholesale trader in livestock and who
is now turning to retail selling. "At least I'm trying to sell", he adds, "but
so far nobody wants to buy a camel or an ox." The export business is
"completely dead" he says, hoping for some domestic business. Regardless
weather the Haj is actually performed or not most Muslims use to buy live
animals in order to slaughter them on Id Al Adha, sharing the meat in an act of
charity with the poor. But this year, it seems, many fewer people were buying
animals. With exports stopped, the over-supply of animals locally led to
significantly lower prices, whereas in a normal year prices used to increase
just before Arafa. On 1 April a fat male sheep ("export quality") was going for
200 Birr at Jijiga market and on 6 April the price had even fallen to 120 Birr.
During the same time period in 1997 a sheep of the same size fetched around 375
Birr. Also the prices for other animals have fallen significantly - except for
donkeys.

The elder trader the mission spoke to at Jijiga market pointed out that the
last time he saw normal trade conditions and prices was this year before
Ramadan (January) and then again towards the end of the fasting month,
Id Al Fitr. "After that", he says, "the business collapsed." Asked for
the possible reasons he explains: "We are regularly listening to the Somali
Service of the BBC Radio. They reported some bad news about animal diseases in
Somalia and Kenya. Then we heard that the Saudis stopped imports. And indeed
the market went immediately down, maybe some two months ago. I was told that
even in Berbera no animals are brought to the ships. Why all that? Look at our
animals - they are all fat and healthy!"

Other livestock markets the mission visited east of Jijiga present similar
situations and similar comments were given by the local people. In Hartisheikh
angry men approached the mission shouting accusations aggressively. Only after
the misunderstanding was cleared and the men understood that the mission
members had nothing to do with imposing the livestock ban and were, to the
contrary, investigating its impact, did the men calm down and start to talk.
One trader explained that around this time last year he had sold 50 sheep, 70
goats and 50 cattle. "Now I brought only 22 oxen to the market but I cannot
sell even one animal." Another one, owner of some camels, reported similar
experiences. Even for the domestic use and consumption hardly any animals are
sold. Why, if the prices are cheap and animals, due to availability of water
and pasture in good condition, are there no sales? "Everybody has enough
animals", they answer, "and animals brought across the border into `Somaliland'
were brought back. Now people are even tired of bringing animals nobody wants
to the market. That's why Hartiskeikh market is almost empty. Why should we
bother to spend money on bringing animals here, entering the market, paying
fees, spending money on fodder and water if we cannot sell?"

In Harshin, across the vast grass plain of Banka Balad some 50
kilometres east of Hartisheikh, the local SERP station keeps records of local
market data. Interesting to note is the slight price increase from January to
February but also the reduced number of animals brought to the market and the
increased number of animals left unsold. Since the male sheep used to be the
main export commodity from the Harshin market, we focus on this species as an
example:

As a number of interviewees pointed out, the Ethiopian-Somali livestock exports
through Hargeisa and Berbera were traditionally paid in a mixture of cash and
kind. While payments were often postponed until the animals were actually sold
in Saudi Arabia, the ships used to come back loaded with goods from the Gulf.
The "Somaliland Two-Year Development Plan" mentioned above lists the three
principal imports at Berbera port as sugar (1997: 39.2 per cent of total import
volume), rice (27.2 per cent) and wheat flour (10.9 per cent). Other major
imports include building materials, oil, car spare parts, cigarettes, soap,
clothes, pasta and dates. On the Ethiopian side of the border the favoured
barter commodities are generally sugar, rice, pasta, dates, textiles, shoes
and - particularly in Hartisheikh town - electronics.

The cessation of livestock exports has had a serious impact on the
economy of the visited area of Somali Region: cash income from livestock
exports, on which prior to the ban the large majority of the population
depended, has stopped. No more goods are coming across the border. Goods
available in local shops represent old stocks and by the time of the mission's
visit had started to become more expensive. Terms of trade are deteriorating
with animal prices going down and grain prices increasing. Due to the people's
significantly reduced purchasing power, the general trade business in the towns
visited has already suffered drastic cuts. According to local informants, in
Harshin about 25 per cent of the shops are closed, in Camoboker about 30 per
cent and in Rabasso and Daror up 50 per cent.

Examples of increased food prices were obtained from local elders and officials
in two places. In Rabasso town prices increased over one year (from
Arafa 1997 to Arafa 1998) as follows: 50 kg of sugar from 125
Birr to 200 Birr, 50 kg of rice equally from 125 Birr to 200 Birr, 10 kg of
pasta from 50 Birr to 85 Birr, 50 kg of wheat flour from 100 Birr to 180 Birr.
A similar picture was presented in Daror town, where informants compared the
prices of three commodities between now and two months ago (shortly before the
ban): 50 kg of rice or sugar were before 120 Birr, now 200 Birr or more; 10 kg
of pasta rose from 30 Birr to 75 Birr. As people in Daror emphasised, generally
all commodities had "skyrocketing price increases" while prices for animals
"are hitting the bottom".

It is not surprising, therefore, that shopkeepers stopped the traditional
practice of handing out merchandise on credit. As a female shop-owner in
Harshin pointed out: "Previously I could rely that my customers pay me later
after they got their money or trading goods back from livestock sales. But now?
Nobody can expect anything. So how can I continue to sell on credit?"

In Hartsheikh, where before the livestock export ban there was also a very busy
general market, trading activities have visibly reduced and even here some
stores have started to close. Reportedly the trend of closing shops, which
began after business started to become sluggish about two months ago, is
increasing week by week. In Hartisheikh the mission had a meeting with senior
administration officials, livestock traders, merchants and elders. Tapping his
living memory, one of the elders recalls: "Around 26 years ago our town started
to export livestock. With the export business also the import business
flourished. Only interrupted by warfare, Hartisheik boomed. Now we are facing a
deep plunge because everything is linked to livestock." Livestock traders
confirmed that while prior to the ban some 800,000 animals (70% shoats, 20%
cattle, and 10% camels) used to pass annually through Hartisheikh for export,
exports have now come to a complete standstill. They also said that they heard
that other major livestock transit towns such as Degehabur (the second biggest
with an estimated annual volume of 450,000 animals), Warder, Darwanaji,
Togochale and Lefe Isa face the same situation. Furthermore, they confirmed
earlier estimations by other sources that the total export volume of these
towns, combined with animals trekked directly across the "green border", make
up to 80 per cent of Berbera's exports, which they estimate to comprise in
total between 2 and 3 million animals annually. As mentioned by their
colleagues in other places visited, Hartsheikh livestock traders also pointed
out the high costs of maintaining "returned" livestock from "Somaliland".
Although fodder and water are available, it is costly to maintain herds on
"stand-by". At a Birka (a cement lined, usually privately owned water
storage facility) in the bush, the mission spoke to camel-herdsmen who said
that the cost of watering each camel at a private Birka was one Birr.
There are also additional expenses for the use of urban holding areas and
middlemen while attendants and shepherds and the like have to be paid or
provided with food.

Besides livestock exports, Hartsheikh used to receive imports from the Gulf
while trade links with central parts of Ethiopia are dominated by the import of
chat (mainly from Hararghe) which is either consumed locally, exported to
"Somaliland" or traded further on within Ethiopian Somali Region along the
"Aware Camp Route". Other imports include mainly potatoes, onions, tea, bottled
beverages and construction materials like lumber and cement. To what extent
would a marketing center like Hartisheikh be able to compensate for losses on
the livestock business with trading in non-livestock related goods? One of the
merchants and shop-owners answers: "You know, that is very difficult, because
also our, the shop-owner's life, depends on a flourishing livestock export,
which used to bring back cash and commodities from the Gulf. Before the ban,
our town was doing well and the stocks in the shops used to get sold almost
immediately. Now we are sitting on stocks which we got three months ago."
Another one says: "During the Dergue time we were able to trade with the
highlands: sugar against livestock, mainly. But later our only livestock
destination became Hargeisa, Berbera and then Saudi Arabia. The chat imports
from the highlands are cash based. The goods you see in our market, from
textiles to electronics, from household-ware to dates, we are not allowed to
trade beyond Kebri Beyah. At the check-point there everything gets confiscated
as `contraband'." Generally, the other merchants agreed that non-livestock
trade is severely hampered by a "very restrictive internal trade policy".

Although in some places occasionally a goat thigh might be exchanged against a
bundle of chat, the business is generally cash based. Since cash earnings from
livestock export sales have ceased, the purchasing power of the population is
rapidly declining. This has affected even the consumption of chat which used to
play a significant role in the daily life of Somali communities and, within the
Somali context, a decrease in chat consumption is an indication of a serious
deterioration in the economy. This is the case in the areas visited, where
generally the chat trade - even though when prices came down - experienced a
significantly reduced volume. Some examples collected in the respective towns
from local informants and chat traders: In normal times Harshin town used to
import 36 chat bags daily. Now only four bags are coming in. While the retail
selling per bundle used to be twelve Birr, it is now down to eight or nine
Birr. A similar situation was found in Camoboker, where in normal times daily
between 200 and 300 bundles used to be sold at 18 Birr per bundle, while now
the volume is reduced to 20 bundles at a price of 15 Birr each. In Rabasso the
chat trade reportedly saw a volume reduction of 75 per cent and in Daror people
say that the volume has been reduced by 85 per cent while prices per bundle
were cut by half coming down from 40 Birr per bundle to 20 Birr. In
Hartisheikh, from where chat usually gets traded further also into "Somaliland"
as mentioned above, the daily arrival of chat was reduced from 60 bags (at 50
kg each) two months ago to 20 bags now, whereas retail prices per bundle have
fallen from 15 to 8 Birr.

Assessing the impact on the local economy of the Saudi livestock import ban
from Horn countries, the mission also tried to find out what steps people take
in order to cope with the new situation. Obviously, who has less also spends
less. Spending less money or, colloquially, "belt tightening", is indeed the
first response of the vast majority of the people in the visited area. As
elaborated above, this has a clearly detrimental effect on the economy overall.
While reduced expenditures are primarily directed at reducing expenses on
"luxury items" such as chat, people are also reducing expenses on clothes,
household goods and food. In various places informants reported that some
people who used to take three meals a day have begun taking only two meals
instead. However, if true, this is likely to be a very recent development,
since the vast majority of adults and children seen by the mission are still in
a fairly good physical condition. The effects of the "spending less strategy"
on human health remain to be seen. In Jijiga for instance, where cases of
"Acute Diarrhoea Disease" and tuberculosis are of major concern, health workers
mentioned that, due to a lack of cash, there were already signs that a growing
number of people could not afford to pay for health services.

Overall, people have not (yet) resorted to slaughtering more animals to
substitute meat for other foods like grain. Rather the contrary is currently
the case as the very low domestic turnovers at livestock markets indicate. Why
don't people eat their animals? Frequent answers given were: "We simply keep
our livestock in the hope that the export market will open again soon."
Secondly, people tend to wait for the onset of the gu' main rainy season
which normally starts in late March but is somewhat delayed this year. With
rains and improved pasture animals will start to produce more milk, which in
the past used to be consumed as a staple food. Moreover, many camels are
currently about to give birth which again will increase milk production. Only
when other coping strategies start to prove insufficient would people return to
a livestock subsistence lifestyle, where, like decades ago, milk and meat were
the staple food supplemented by limited amounts of grain obtained in trade for
hides and skins. Regarding the latter, the mission met only one person, a
female shop-owner in Harshin, involved in this business and even she complained
that the trade in skins and hides decreased, "even for Arafa" as many
fewer animals than usual were slaughtered.

More people living near the "Aware Camps" might start bartering live animals
against wheat and vegetable oil from the refugees but obviously this
possibility cannot compensate for the losses suffered from the cessation of the
regular livestock trade. In areas far away from the camps people are worse off
and do not have this opportunity as part of their "package of coping
strategies".

Migratory labour possibilities - given the plunge of the economy in urban
centers - are scarce while traditional income generating activities like
firewood collection and charcoal production have been affected by the general
reduction of purchasing power. However, some people living near fertile soils
might, during the rainy season, try rain-fed cultivation of short-cycle crops
and legumes. But how successful this coping strategy might be is unknown.

Linked to the sub-clan system and close family ties is the traditional concept
of community solidarity which provides a certain "social safety net" to the
poorer members of the Somali society. This system, called "Hawalad",
functions both at the local/regional level and at the international level.Remittances from relatives living in Gulf countries as well as in Europe
and North America find their way even into remote corners of areas populated by
Somalis. While it is impossible to estimate the magnitude and volume of this
"injection" into the economy of Ethiopia's Somali region, the "Government of
Somaliland" estimates, as reflected in its "Two-Year Development Plan", average
annual remittances flowing into "Somaliland" of 93 million US Dollars. Of this
money, an estimated 62.6 per cent comes from Saudi Arabia and the Gulf States,
while 37.4 per cent is thought to come from "other countries". For Somali
Region, these remittances, of which the distribution is organised usually quite
effectively through a radio communication network, might be also significant,
allowing people in economic stress to cope.

Finally, another very disturbing coping mechanism mentioned by local
authorities was criminal activity. Authorities in Daror, Rabasso and
Hartisheikh reported that criminality had increased significantly since the
impact of the livestock export ban began to be felt. While generally mentioning
"increased theft, gangsterism and armed robberies" administration officials in
Hartsheikh pointed out that currently on average every night in the town ten
houses get broken into, whereas it used to be "only one or two per night" two
months ago.

Although it is unsure how long the Saudi livestock ban will remain in place,
there is an urgent need to look for solutions to the current economic problems
of the region. "Find alternative livestock markets for us in the Highlands!"
says, for instance, the chairman of the Hartisheikh town council, a plea that
is shared by many. The mayor of Camoboker town emphasised: "An alternative
market in central Ethiopia - that would be, for the time being, the one and
only alternative to keep our economy going."

The same official also urged diplomatic steps: "Our people are looking into a
dire future", the Camoboker mayor said, adding that "they feel that it is of
crucial importance that a high level delegation goes to Saudi Arabia to defend
their interests." The same sentiment was express in many other areas by
livestock traders and merchants.

A third suggestion was formulated only in Hartisheikh. Referring to the
non-livestock potential of his town, a merchant pledged: "Free trade. Legalise
all so called `contraband' by putting a proper taxation system in place with
regular tariffs applicable to all. That would allow the state to collect import
tax revenues, and for our town it would be a proper source of alternative trade
income."

During talks with representatives of the regional administration in Jijiga
there was also some discussion of the idea improving livestock quality through
better veterinary services, providing inspection and certification facilities
inside Ethiopia and some kind of revenue sharing arrangement with
"Somaliland".

As the field mission showed, the ban on livestock imports from the Horn of
Africa imposed by Saudi Arabia has severely affected the livestock export
oriented economy of the visited areas of Somali Region. The rapid decline of
buying power is forcing people to return to a traditional subsistence livestock
economy. This "return to the past", combined with certain coping possibilities
described above, would not lead to a food emergency in the near future;
however, it would certainly increase the vulnerability of people directly
involved in animal husbandry. The cessation of exports will also lead to heavy
livestock populations being kept locally, thus increasing the competition for
grazing land and water resources. Even when there was a functioning livestock
export market competition for resources has gradually increased over the last
20 years, particularly where cattle were introduced into a livestock economy
which previously was dominated by sheep, goats and camels. While these
traditional animals are well adapted to the harsh climatic conditions of the
region (camels can survive a couple of weeks without water!), cattle need both
good pasture and frequent access to water.

While the impact of the ban on livestock breeders might be mainly a forced
return to a subsistence economy it has not threatening their existence per
se, the situation is quite different for people involved in the broader
aspects of the export oriented livestock economy. Many in this group are indeed
facing an uncertain future which might throw them back into poverty if coping
mechanisms become inadequate.

For both groups the deep cut into the usual economic patterns means a forced
change of lifestyle. This abrupt change back to a subsistence economy could
lead to a general dissatisfaction, with the possible consequences of social
unrest and even political instability.

The Ethiopian Government and the donor community agree that peace and stability
are crucial preconditions for sustainable development. The U.S. Information
Service, for instance, in its news release of 30 March, states that the
purpose of the current American multi-year aid programme is "to promote
enhanced food security by supporting improvements in the efficiency of
agricultural markets and by encouraging increased private sector involvement in
the Ethiopian economy." While some progress has been made recently in improving
social services, implementing development projects, increasing private
investment and enhancing security, the current economic uncertainty threatens
to negate even these small gains and increase the potential for unrest.

"Somaliland" is likely to suffer even more as the administration has lost its
main source of revenue and the overall economy of the country is even more
closely connected with livestock exports. Also, UNHCR's current refugee
repatriation programmes could face a situation where it becomes more difficult
to re-integrate returnees into a socially and economically vulnerable
environment.

Initiatives to address the current problem are urgently needed and the
suggestions from administration officials, traders, herders and merchants
mentioned above all deserve careful consideration, further study and follow-up.

DISCLAIMER

The designations employed and the presentation of material in this document do
not imply the expression of any opinion whatsoever of the UN concerning the
legal status of any country, territory, city or area of its authorities, or
concerning the delimitation of its frontiers or boundaries.